The amount you can borrow will depend directly on the value of your seaside home. It is critical to know what your home is worth prior to moving forward with plans to refinance, obtain a home loan, or put your seaside home up or sale.
One way to do this is to determine the market value of the seaside property. A simple way to do this is to look at other comparable seaside homes in the same neighborhood and see what prices they have been sold recently. The Internet or real estate agents are effective and efficient resources for this purpose, and will most likely come at no cost to you.
Another way to find the value of your seaside property is to find its appraised value. To do this you need to pay for the help of a trained and licensed professional. They will take into account a variety of factors, including the homes square footage, construction quality, floor plan, design, surrounding neighborhood, proximity to important services and locations, as well as the landscaping, among other factors. An appraiser will usually cost anywhere between $300 and $500.
The appraiser will be able to determine what the replacement cost of the home would be. The replacement cost is generally used by insurance companies when determining how much the home should be insured for. It takes into account what the seaside home would cost to build in today's dollars.
One important thing that many homeowners have a hard time understanding is that homes appraised value, replacement cost, and worth are three completely different numbers. The homes worth is based on what a buyer is willing to pay for a home and is generally based on market conditions. In a red hot market it is not uncommon for worth and a homes appraised value to be higher than the replacement cost. While in a slow market the homes appraised value and worth will likely be less than the replacement cost especially if inflation is high.
In Closing
If you are about to put your seaside home on the market, talk to your real estate agent about adding a small buffer in to the price to account for repairs or negotiations. Your agent will be able to help you establish a selling price for your seaside property.
Hubert Miles is the founder of Waterfront Houses USA, an online advertising service that provides Seaside Homes and Seaside Property For Sale in the US and Canada.
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